Gallup Settles With U.S. For $10.5 Million Over Inflated Contracts

The Gallup Organization has settled with the United States for $10.5 million amid allegations it inflated its federal contract prices and improperly negotiated a FEMA subcontract, the Justice Department announced Monday.

The Washington, D.C.-based polling and research firm violated the Fair Claims Act when it "overstated its true estimated labor hours" in proposals for U.S. Mint and State Department contracts, according to the U.S. complaint filed in November 2012. The complaint also alleges that Gallup "engaged in improper employment negotiations" with FEMA official Timothy Cannon to procure a subcontract at an inflated price, in violation of the Procurement Integrity Act.

In April, Cannon settled with the United States for $40,000 after accepting an offer of employment from Gallup while negotiating the organization's FEMA subcontract, according to the Justice Department. Cannon was sentenced to probation after pleading guilty in related criminal proceedings.

The whistleblower who originally raised the False Claims Act allegations, Gallup's former Director of Client Services Michael Lindley, stands to receive $1,929,363 of the government's recovery sum, according to the Justice Department.